Here is what CEA V. Anantha Nageswaran said after the Economic Survey
- CEA V. Anantha Nageswaran speaks about India's growth, China plus one, rupee depreciation and Trump tariffs post the release of the Economic Survey 2025
Chief economic advisor V. Anantha Nageswaran on Friday said governments reducing regulation and simplifying it would help boost employment, generate income and, in turn, bolster domestic consumption.
In a press briefing following the release of Economic Survey 2025, Nageswaran said India's current growth rate positions the country among the fastest-growing economies in the world. Here’s what he said on a variety of points raised in the Survey:
On growth outlook: For FY25, we had presented a growth outlook of 6.5-7%. We are presenting a growth outlook of 6.3-6.8% for FY 26. The risk factor is not only due to changes in the global playing field but also the global stock markets, which have also become lately volatile, as we witnessed earlier this week.
On sub-7% growth: India still remains the largest growing economy among large economies in the world. The global export share of GDP has been coming down. So whenever we get the opportunity, to generate higher export growth, as we were able to do so in 2021, and 2022, we should be able to capitalize on that. Another point 0.5% to 1% additional growth can come from agriculture, which will take it to seven and a half or eight. So, in general, these are all the ways in which we can lift this baseline number, which reflects the current uncertainties. And the fact that global economic activity has slowed down in the last one and a half years to two years.
On Viksit Bharat by 2047: For Viksit Bharat, in respect of the nominal GDP growth that is required is around 10%. There will be years when we will achieve more and years when we will achieve lower than that depending on the global scenarios.
On agriculture: We have to augment internal capacity for growth, particularly in the agriculture sector. The agriculture sector has the potential to contribute to up to 1% of the GDP growth. The private sector can do its part by lifting the spending on R&D, striking a better share between capital and labour share in their businesses, doing better in terms of marketing ultra-processed food, and taking mental health seriously.
On China plus 1: Importance to be given to domestic drivers, building domestic supply chain resilience, which is the same as what has been the thought process behind the Atmanirbhar Bharat, China plus one, etc. So, this is the continuation of the same theme. The Survey talks of how we can adopt industrial policy without necessarily which could, without necessarily being protectionist about it. At the same time, it can also be an inducement for productivity.
On dependence on China: Now, dependence on a single country is, as I mentioned repeatedly in my presentation, figures in the discourse, in the policy decisions, in the policy discourse, in America. It's a global challenge. That is why we joined the Critical Minerals Partnership and we ourselves are setting up partnerships and policies on battery storage and some of the PLI schemes on, components for solar energy, etc. So we are taking policy steps already and we are striking global alliances to make sure that our supply chain is diversified. But simultaneously, we have to keep an eye on what is the level of dependence and how critical it is, how constraining it is. So it is a multifaceted, multi-pronged action, which we are already engaged in.
On the stock market: The massive growth in retail participation in the Indian stock market is a good thing. But when the market corrects, it could have implications on spending intentions and the sentiment effect could be significant. This is one thing we have kept in mind when we came up with the outlook for FY26.
On deregulation by governments at all levels: The recommendation, which is made not just to the Union government, but to governments around the country, is actually a step to boosting employment, income generation and therefore consumption. Deregulation is exactly towards that. It is not a recommendation only to the Union government. By simplifying regulations by looking into the nuts and bolts of regulations that affect small businesses, we are lowering the cost of doing business for them, opening up the space for them to hire more, which will lead to income growth and, therefore, better consumption.
On energy transition: The concentration of financing, the concentration of supply chain, and the concentration of risks, etc., means that we need to focus on public transportation and adaptation as an important strategy rather than commission mitigation. Business, as usual, carries the risk of growth stagnation.
Also Read: Economic Survey cautions of geopolitical risks, high import dependence for energy transition
On falling FDI levels: FDI, as a share of GDP has come down much faster than the export share of GDP globally and we are no longer competing only with other emerging market nations, we’re even competing with industrialized countries which want to friendshore, onshore their investments. Therefore, one of the biggest magnets for FDI is actually the prospect of profitable returns, which is what India has been providing, whether it is portfolio investors or direct investors. The last two years of continuous exits actually demonstrate that. One way to ensure profitability exists is to ensure steady economic growth and, wherever possible, accelerate economic growth beyond that, whatever procedural requirements or opening up of sectors. We have done most of those things in several areas, like defense, space, drones. So, whether it is with respect to tariff policies or visa policies etc, the government has been responding to the emerging situation, and therefore the FDI number should be looked at from the perspective of what is happening elsewhere in the world, in terms of overall (decline in) FDI flows in general.
On crude oil impact: We are not expecting at this point a major upside risk to the crude oil prices and that is not something we explicitly model or forecast when we develop an estimate for real GDP growth.
On rupee depreciation: I think the recent actions taken by the central bank (RBI), either with respect to the rupee or with respect to domestic liquidity or the right steps in the right direction.
On employment generation: The government can continue to take policy actions, as it has been doing with respect to PLI schemes or labor intensive sectors, and also in terms of the deregulation action by not just the Union government, but the state governments and local governments. Contribution to employment generation is by reducing the fixed cost of doing business so that firms can raise the variable cost by hiring. Not everything needs a policy tweak or a policy intervention. Some of it is in the natural self interest of businesses to be able to find this balance.
On taxing companies replacing labour with AI: I'm not getting into specifics because we have not reached that point. It is a potential scenario that can develop, if over time, and this is a point made by the IMF in its discussion paper that came out roughly about a year ago, which is that if the social impacts of technological deployment results in such massive labour displacement, then in in several countries, there will be a call for action on the part of the government authorities. But that is a hypothetical scenario which may develop if all considerations are not kept in mind, whether it is in terms of labour redeployment, labour re-skilling, up, skilling, etc. So this is at the moment, there’s no specific action that is contemplated and not what is hinted at in the survey.
On number of working hours: I don’t want to get into discussions on the number of hours happening in the private sector. This is not something I want to join. The point here is that small businesses do get seasonal surges in orders and it will be good for them to have the flexibility to achieve the breaching. It is all about managing the seasonal surges and not about managing the number of hours.
On tariff war after Trump: It is very difficult to give you a quantitative estimation with respect to the impact of trade policies that may be pursued by other countries because right now it is hypothetical and speculative. But in general, what we have done is take into consideration the uncertainties posed by the current global environment in terms of rising trade restrictions and rising investment restrictions and therefore, the growth number that we have spelt out thus reflects these uncertainties.
On solar energy supply chains: Capacities have increased, whether it is in panels, modules, cells, etc., but at the same time, dependence also is there at a significant level. So it is not as if India has been passive and idle and simply putting on imports. Whether it is in electric vehicle mobility the battery cell components, or in the components that go into solar panels, etc. The domestic capacity increase is happening, but given the state of demand and the projections for demand growth, dependence also will continue to be there and therefore we need to. This is something that one cannot give a mechanical or a formulaic answer to, but it is about consciousness with which we basically adopt multiple approaches to handling this supply chain dependence for the foreseeable future. One of the answers we gave was, therefore, public transportation… giving an important role for… nuclear-powered transmission fuels, etc. are all parts of the strategy.
On tariff threats from the US: We don't want to talk about speculative scenarios of a single country, trade policies, etc. In general, I think the steps that we need to take are in fact the survey, the chapter on the external sector has items on trade policies and the kind of industrial policies that have been adopted by countries in the past.
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